Dickerson: How to think about the Senate's (latest) health care bill

In a high-stakes bid for conservative support, Senate Majority Leader Mitch McConnell has agreed to demands from Republican Sen. Ted Cruz of Texas to allow insurers to sell low-cost, skimpier plans as part of a new health care bill.
Time

Why should anyone care what I (or any other columnist who does not pretend to have any specialized health care expertise) think about the Senate's latest proposal to repeal and replace Obamacare?

The short answer is that you probably shouldn't.

The president of the United States has already warned you that I and my colleagues in his ever-expanding universe of fake news are little more than shills for Obamacare's Democratic champions. And even if you're not as cynical as he is, it's fair to assume that my take on the Senate bill is shaped largely by my own values.

So today, in lieu of passing judgement on a bill that is likely to undergo even further changes before it reaches the president's desk, I've proposed three selfish questions I believe reasonable people across the political spectrum should ask before deciding whether the Senate's approach makes sense for them and their loved ones.

This may seem an odd place to start, especially if you don't work for an insurance company. After all, even drug manufacturers suggest asking your doctor if their product is right for you, not the company who made it.

But the majority of Americans rely on some sort of insurance coverage to pay most of their medical costs. And their ability to purchase that coverage, either through an employer or on the individual insurance market, depends on some company's willingness to sell it.

Indeed, one of the primary arguments for replacing Obamacare is that insurance companies are either refusing to provide individual policies that comply with the federal government's coverage mandates or poised to levy premium increases that would make those policies unaffordable.

Economists and most industry executives blame the Trump administration and the Republican Congress. They say the GOP has scared insurers off by refusing to fund cost-sharing subsidies the insurance companies were counting on to keep premiums down.

But you needn't decide who's responsible for the status quo to understand that policyholders can't know what to expect until the companies that insure them do.

Michigan's health insurance exchange is healthier than most, in part because the state allowed participating insurers whose proposed premium schedules were due last month to file two versions — one that assumes that Congress will ultimately appropriate money for the cost-sharing subsidies provided for under Obamacare, and a second that assumes no subsidies are forthcoming.

Insurers also will have until September to withdraw any of the insurance products they've proposed to offer on the Michigan exchange — so would-be policyholders won't know until fall what coverage is available what it will cost.

But the Senate bill also introduces new instability by allowing insurers to offer low-cost, high-deductible policies that skimp on coverage as long as they also provide more comprehensive products that comply with Obamacare's quality mandates.

AHIP, the health insurance industry's leading trade association, warned in a statement issued last week that the change could "fracture and segment insurance markets into separate risk pools" for younger, healthier customers and older, sicker ones, destabilizing the industry and leaving the latter group with dramatically higher premiums.

HAP's Kline told me her company can figure out how to operate profitably under "any set of rules Congress wants to establish," so long as those rules are clear and so long as insurers have a reasonable amount of time to adjust to them.

Whether HAP will be able to offer affordable, comprehensive coverage to the same employers and policyholders it serves now after making such adjustments is, of course, a different matter. But unless the government decides to pay for health care directly, any health care bill that leaves insurers worse off is likely to hurt policyholders as well.

2, The Senate's previous repeal-and-replace bill would have eliminated Obamacare's surtax on investment income, but the new bill retains the surtax. Shouldn't this concession satisfy critics who complained the original bill was just a disguised tax cut for wealthy people?

The new bill would keep more money in the system than its predecessor. But it will also allow policyholders to use tax-exempt health savings accounts to pay their insurance premiums.

The more you can afford to save, the better coverage you'll be able to buy. And the higher your income bracket, the more taxes you'll avoid on every dollar you stash in an HSA.

Combined with the reductions in Medicaid spending, it's another way to transfer money from the poor to the rich. Consumers just need to figure out whether they earn enough to reap the disproportionate advantages the revised bill offers to wealthier Americans.

3. I feel bad that the Senate bill would reduce the money available to Medicaid recipients, but I've never qualified for Medicaid, and I anticipate going on Medicare when I retire. What impact would Medicaid cuts have on me?

Most people think of Medicaid as a program for the poor and disabled. But it's also what picks up the tab for in-home and nursing home care — costs Medicare doesn't cover — when your retirement savings run out.

According to a study commissioned by the Health and Human Services Department, more than half of Americans who reach their 65th birthday will need in-home and/or nursing home care before they die, some for extended terms in which they risk wiping out hundreds of thousands or even millions in retirement assets.

If the Medicaid cuts that remain the centerpiece of the newest Senate Bill are adopted, the Bipartisan Policy Center in Washington forecasts in a recent assessment, "states will not be able to sustain spending for long-term services and supports as baby boomers begin to need these services and supports.”

Some workers may be able to fill the gap by purchasing long-term care policies. But it would be foolish to assume the Medicaid cuts mandated by the Senate bill will never be relevant to your own care.